Survey evidence suggests firms do not use pricing policies that vary prices in
response to demand changes because they fear that such practices would antagonize
consumers. We investigate this hypothesis using a dataset from a firm that has experimented
with different pricing schemes. Each scheme is characterized by how much prices respond to
demand variations. We find evidence that is consistent with the hypothesis that consumers
take advantage of the opportunities offered by price changes and inconsistent with the
hypothesis that consumers are antagonized by price changes caused by demand shocks.